Almost correct, see
http://www.favicon.com/#1-9 for exactly what's happening.
For a (somewhat accurate) total number of people bookmarking your site, take the number of favicon.ico errors and divide by the percentage of IE 5.0 users at your site. In other words, if 80% of your visitors ar using Internet Explorer and you had 100 favicon errors, figure 100/.80 = 125 bookmarkers (approximately).